Which term refers to a specific method of insurance coverage based on a fixed amount?

The term that describes a specific method of insurance coverage based on a fixed amount is Amount Based Coverage. This type of coverage indicates that the insurance payout is determined by a specific pre-established sum rather than a variable figure that may change based on circumstances or calculations like percentages or multipliers.

In practical terms, Amount Based Coverage is beneficial for individuals or groups who want predictability in their insurance claims. For example, if a policy stipulates that the coverage is set at $50,000, that amount is guaranteed regardless of fluctuations or different scenarios that could impact other types of coverage. This fixed nature provides clarity and assurance for policyholders, making it easy for them to know exactly what they can expect to receive in the event of a claim.

In contrast, other options may involve variables such as percentages of a loss or total value, which can lead to uncertainty in claims processing, while Amount Based Coverage offers a straightforward and easily understandable framework for insurance benefits.